Uebber, who has been touted as a candidate to become chair of the steel-to-submarines conglomerate, was backed by shareholder representatives Cevian and the Alfried Krupp von Bohlen and Halbach Foundation, but his demands on board compensation drew fire from employee representatives, the sources said. Thyssenkrupp declined to comment.

The disagreement came a day ahead of the group's annual news conference on Wednesday, at which CEO Guido Kerkhoff will be grilled on a landmark corporate split that has so far failed to revive the group's share price.

Uebber had been expected to fill one of two vacant seats on Thyssenkrupp's supervisory board.

One of the two vacancies was filled on Tuesday with the appointment of Martina Merz, chairwoman of automotive supplier SAF Holland.

"With her expertise and experience, Ms. Merz is a competent addition to our supervisory board," said Thyssenkrupp Chairman Bernhard Pellens, who has to step down in 2020 under German corporate governance rules.

Sources told Reuters this month that Merz, who also sits on Lufthansa's supervisory board and the board of directors at truck manufacturer Volvo, was among the candidates to join the board.

Restructuring expert

Uebber has a lot of restructuring experience, having been a core part of Daimler's management team that nursed Mercedes-Benz back to health following a messy divorce from Chrysler.

In 1998, Daimler-Benz bought Chrysler Corp. for $36 billion in a deal promising at least a billion in synergies within the first year, hyping the combination as the birth of "a child with extraordinary genes and extraordinary potential."

The level of synergies between volume automakers and premium brands proved less successful than the companies had hoped.

In 2007, Daimler sold an 80 percent stake in Chrysler to private equity for 5.5 billion euros, arguing that unwinding the merger was the best way to create "the greatest overall value -- both for Daimler and Chrysler."

More recently, Uebber has been the architect of a new corporate structure for Daimler which allows the automaker greater flexibility to list individual divisions, such as Daimler Trucks.

Thyssenkrupp is in the process of overseeing a corporate breakup which sees a listing of one of its main divisions as a strategic goal.

Daimler said in October that Uebber would leave the company after it appointed Ola Kaellenius as CEO, a position for which Uebber had been a contender.